A company is considering building a bridge across a river. The bridge would cost $350,000 to build and nothing to maintain. The following table shows the company's anticipated demand over the lifetime of the bridge: Price Quantity (Dollars per crossing) (Thousands of crossings) 4.00 0 3.50 40 3.00 80 2.50 120 2.00 160 1.50 200 1.00 240 0.50 280 0 320 If the company were to build the bridge, its profit-maximizing price would be , and itwould not produce the efficient level of output. If the company is interested in maximizing profit, itshould not build the bridge because profit would be . (Note: If the company incurs a loss, be sure to enter a negative number for profit.) If the government were to build the bridge, it should charge a price of . True or False: The government should build the bridge.
A company is considering building a bridge across a river. The bridge would cost $350,000 to build and nothing to maintain. The following table shows the company's anticipated demand over the lifetime of the bridge: Price Quantity (Dollars per crossing) (Thousands of crossings) 4.00 0 3.50 40 3.00 80 2.50 120 2.00 160 1.50 200 1.00 240 0.50 280 0 320 If the company were to build the bridge, its profit-maximizing price would be , and itwould not produce the efficient level of output. If the company is interested in maximizing profit, itshould not build the bridge because profit would be . (Note: If the company incurs a loss, be sure to enter a negative number for profit.) If the government were to build the bridge, it should charge a price of . True or False: The government should build the bridge.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
1 . Problems and Applications Q4
A company is considering building a bridge across a river. The bridge would cost $350,000 to build and nothing to maintain. The following table shows the company's anticipated demand over the lifetime of the bridge:
|
|
Quantity
|
|---|---|
|
(Dollars per crossing)
|
(Thousands of crossings)
|
| 4.00 | 0 |
| 3.50 | 40 |
| 3.00 | 80 |
| 2.50 | 120 |
| 2.00 | 160 |
| 1.50 | 200 |
| 1.00 | 240 |
| 0.50 | 280 |
| 0 | 320 |
If the company were to build the bridge, its profit-maximizing price would be
, and itwould not produce the efficient level of output.
If the company is interested in maximizing profit, itshould not build the bridge because profit would be
. (Note: If the company incurs a loss, be sure to enter a negative number for profit.)
If the government were to build the bridge, it should charge a price of
.
True or False: The government should build the bridge.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education